Corporations collect tons of data on their customers, from demographic information to preferences. But how can they better leverage that information so that the entire company --and its customers -- benefit?

For Navid Safabakhsh, principal at San Francisco and Philadelphia-based interactive web development agency Freshout, the solution is to capture the power of the Web, put that information to better use and open up new revenue streams in unexpected places.

I spoke with Safabakhsh about how his company combines open source, collaboration and the cloud to help companies innovate by plugging into the Web -- and their customers.

SmartPlanet: What does Freshout do? What services does it offer?

Navid Safabakhsh: We look at a particular industry that's stagnant and that wants to innovate, and we introduce a new product to a new demographic that the company has never touched before. Companies can be destructive. We try to create and help businesses by introducing services or finding them from outside to be constructive. It's all about ROI at the end of the day. If it ends up having the 'wow' factor too, great. But it's not necessary.

Usually a customer approaches us with an idea of what they need to do. We have companies with $3 million in funding coming to us for web applications. It's a very collaborative type of environment, and they might come in with wireframes and we might give them competitive research. We work together, joined at the hip.

Our clients for the most part are introducing a new service. You have service design and product design. Service design creates a new service, product design is where you create the physical manifestation -- such as a web application. We've been focusing on completely new services.

For example, we're building the software for a turf management system that is ideal for sports fields, agriculture, etc. in dry states. It's a very attractive solution.

We're helping another client rethink the communication between recruiters and a job-seekers with a web-based solution.

Another client is FrameBuilder. We took a company that was originally positioned for B2B sales and designed a site for them so that they could leverage the infrastructure they already have to address individual consumers. It's a combination of web development and service design to supplement their core B2B business.

SP: Freshout works with companies from many different areas of the economy: Online startups, manufacturing, financial organizations, agriculture, hiring firms, retail -- even sports. What's next?

NS: I've been really interested in preventative healthcare, and there's a ton of opportunity there. There's a lot that can be done around retail experiences -- healthcare, agriculture, manufacturing -- that can be done remotely, with the web.

Take RFID, for instance. Say a customer tries on clothing in a store. That clothing gets scanned and her friends on social media networks could be alerted or give feedback or buy a different color for themselves. We're taking variables and putting more use to them.

That kind of innovation can happen when smart retailers think about bringing more value to shopping. A bunch of pictures of hoodies don't provide enough value to make a customer buy a product.

Input-based technologies are something I really believe in. Sensors that you can install and collect data and manage that information by sending it to someone who makes use of it. You car and your home might be getting smaller, but there's more innovation -- connectivity -- needed around that. That's where we're investing. It could be an algorithm or based in the cloud, or whatever. But that piece of data is sitting there by itself, and it's not being sent to where it can be put to better use, such a hospital, or a firm, or a friend. We're going to be doing more in that.

In some areas, we'd love to make the product ourselves. But in other areas, we don't have the infrastructure for it. Sometimes we work with venture arms of larger companies when we can't finance it ourselves.

SP: You mentioned healthcare reform, which has a strong public service aspect to it. Do you envision doing more work in areas like that?

NS: Education and learning, there's a lot to be done there. Games and how people interact. There's a pretty big market for toys that you can physically interact with and then that information gets reflected online.

My cousin has physical trouble with reading, and there's correction software she uses, but it's poorly designed. My [Iranian] mother has MS (multiple sclerosis) and I think about how she wasn't able to connect with someone who spoke Farsi here in the U.S. She is a person who's not computer-savvy. It takes a lot of effort for her to use something like a mouse. But a video conference with someone who speaks Farsi who has experience dealing with MS -- that could help.

It's about solving a problem when a person doesn't want to, or can't, spend the time and effort to input what they need. The web neglects this specialized population. Hardware needs to be used in some way. For her, it might be a remote with three buttons. It might be a phone call in which someone can remotely start up Skype for her. There's a customer service aspect of it, too.

If we were to address problems like this now, we'd partner up with industrial design firms because we don't have the depth of expertise involved in all the aspects needed to address that solution. What we're really good at is software and usability and managing the experience. We're exceptionally good at knowing when an experience isn't optimal.

In the next two years, we're looking to partner up with firms to accomplish this.

SP: You've said that Freshout is looking more into "cutting out the waste in the enterprise." Part of that is by leveraging the cloud yourselves. How?

NS: Almost all of our new businesses are in the cloud, because of the advantages. The fixed cost for a server is so high, and a disruptive service might not be disruptive, and you're not sure how it will pick up. Cloud services are a primary component to ensure when business picks up that you have the infrastructure to grow. We highly advise our customers to grow toward the cloud.

Open source for our company is also really huge. We release all the source code that we have to the general public and the communities we work in. We make a concerted effort to do that.

All of what we use is open source. We're a completely Ruby-on-Rails engineering team. The bigger idea of sharing and collaborating, we push that hard. It's a distinct quality: are you willing to money into investing money and people's salaries into something that might not make you money right away?

Flutter, a CMS platform we designed for Wordpress, is completely open source. And we're also working on a product called Breeze, which addresses better template management. It's about giving a user control over their site without letting them mess it up by orchestrating certain options with others, such as offering a coordinated palette of colors and design elements when the user specifies one option. It implements a design principle into the site and doesn't allow you to break basic design rules. That's its goal; its ambition.

SP: That leaves one question: If you give away the company jewels according to open source, how do you make money?

NS: Make no mistake, the services for corporations are the primary source of income. The open source hasn't been a huge revenue generator, but it has other benefits, such as a huge beta testing audience that helps make your software bulletproof. It only works if you have tools in place to facilitate and organize feedback.

If you want to make open source work for you, you need to have a clear strategy. We collect market data to guide our future decisions.

Clients come to us with ideas of varying degrees of specificity, and we have different pricing packages to handle that. Clients may have all the knowledge in the world, but they might not have the web infrastructure. There's always an idea, though, and we build it up for them.

Andrew Nusca is a former writer-editor for ZDNet and contributor to CNET. He is also the former editor of SmartPlanet, ZDNet's sister site about innovation. He writes about business, technology and design now but used to cover finance, fashion and culture. He was an intern at Money, Men's Vogue, Popular Mechanics and the New York Daily Ne...
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